The Societal Responsibility of the Companies and Financial Performance: An Unresolved Debate

  • Authors

    • L. Benazzou
    • M. A. Nafzaoui
    2019-03-01
    https://doi.org/10.14419/ijet.v8i1.11.28103
  • social responsibility, financial performance, quality of management, multiple regression analysis.

  • Abstract

    The purpose of this work is to examine the extent to which the Societal Responsibility of Companies (SRC) affects their financial performance. The data used in this study are elicited from a survey questionnaire administered during a year to a sample of firms.

    The statistical tool developed for this research is the multiple regression analysis along with “the quality of management†being used as a control variable. A principal components analysis has allowed us to show that the financial performance of businesses (FPB) is one-dimensional, whereas the SRC has three dimensions.

    The results of this research reveal two findings: one suggests that there is a positive link between SRC and the financial performance of businesses, the other highlights the negative correlation between these two variables.

     

  • References

    1. [1] Allouche J, Laroche P (2005), Social responsibility and financial performance of businesses: a synthesis of the literature. Symposium on "Corporate Social Responsibility: reality, myth or hoax? » Nancy (a)

      [2] Allouche J., Laroche P (2005), A meta-analytical examination of the relationship between corporate social and financial performance. Acts of the 16th Annual Congress of the Association francophone de HRM (HRMA), Paris (b).

      [3] Aupperle KE, Carroll AB., Hatfield JD, “An empirical examination of the relationship between corporate social responsibility and profitabilityâ€, Academy of Management Journal, 28(2), (1985), pp 446-463.

      [4] Barnet ML, Solomon RM (2002), Unpacking Social Responsibility: The curvilinear relationship between social and financial performance. Academy of Management Proceedings.

      [5] Crifo P, Ponssard JP (2008), RSE et/ou performance financière : points de repère et pistes de recherche. Cahier de Recherche. EcolePolytechnique, CNRS.

      [6] Makni R, Claude F, Bellavance F, “Causality between Corporate Social Performance and Financial Performance: Evidence from Canadian firmsâ€, Journal of Business Ethics, vol. 89, (2009), pp. 409-422.

      [7] Margolis JD, Walsh JP (2003), Misery loves companies: Rethinking Social Initiatives by Business. Administrative Science Quarterly, vol. 48, 248-305.

      [8] Maignan I, Ferrell OC, Hult GT, “Corporate Citizenship: cultural antecedents and business benefitsâ€. Journal of Academy of Marketing Science, (1999), pp. 455-469.

      [9] Mc Williams A., Siegel D ( 2001), Corporate social responsibility: a theory of the firm perspective. Academy of Management Review, vol. 26, No.1, pp, 117-127.

      [10] Orlitzky M, Schmidt FL, Rynes SL (2003), Corporate Social and Financial Performance: A Meta-Analysis. Organization Studies, vol. 24, pp.403-441.

      [11] Sanchez J.L. F., Sotorrio L, “The Creation of value through Corporate Reputation, Journal of Business Ethics, vol. 76, (2007), pp. 335-346.

      [12] Serious S.B., WADDOCK S, “A Look at the Financial-Social NEXUS performance when quality of management is held constantâ€, International Journal of Value-Based Management, Vol. 12, No. 1, (1999), pp.87-99.

      [13] Simpson W., Gary K, “The Link Between Corporate Social and Financial Performance: Evidence from the banking industryâ€, Journal of Business Ethics, vol. 35, (2002), pp. 97-109.

      [14] Thietard RA (2003), Research Methods in Management Science, Paris, Edition Dunod.

      [15] Ullmann (1985), A Data in search for a theory: a critical examination of the relationship among social performance, social disclosure, and economic performance, Academy of Management

      [16] Review, 10, 540-577.

      [17] Van Beurden P., Gossling T, “The worth of Values - A Literature Review on the Relationship Between Corporate Social and Financial Performanceâ€. Journal of Business Ethics, vol. 82, (2008), pp. 407-424.

      [18] Waddock S.A., Serious SB, “The Corporate Social Performance Performance-Financial Linkâ€, Strategic Management Journal, Vol.18, No.4, (1997), pp. 303-319.

  • Downloads

  • How to Cite

    Benazzou, L., & A. Nafzaoui, M. (2019). The Societal Responsibility of the Companies and Financial Performance: An Unresolved Debate. International Journal of Engineering & Technology, 8(1.11), 127-130. https://doi.org/10.14419/ijet.v8i1.11.28103

    Received date: 2019-03-01

    Accepted date: 2019-03-01

    Published date: 2019-03-01